In many countries, monetary policy decisions are made by committees. In                  the United States, these decisions are made by the Federal Reserve's Federal Open                  Market Committee (FOMC), which consists of the seven members of the Board of                  Governors and the presidents of the twelve district banks. This book examines the                  process by which the preferences of the FOMC's individual members are translated                  into collective policy choices. This focus on the aggregation of individual                  preferences into group decisions is unique and provides an important perspective on                  the evolution of monetary policy choices.To study decision making by the FOMC, the                  authors have used both formal voting records and detailed transcripts and summaries                  of deliberations contained in the committee's Memoranda of Discussion and FOMC                  Transcripts. The latter sources have been used to construct data sets describing                  individual committee members' policy preferences for the 1970-1978 and 1987-1996                  periods when the FOMC was chaired by Arthur Burns and Alan Greenspan, respectively.                  These data are used to estimate monetary policy reaction functions for individual                  Committee members and to explore the role of majoritarian pressures, pressures for                  consensus, and the power of the chairman in collective decision making. The rich                  anecdotal evidence found in the Memoranda of Discussion and FOMC Transcripts                  inspires the narrative approach taken in two chapters, on the influence of political                  pressure on FOMC deliberations and on the relevance of the time inconsistency                  problem for the rise of inflation in the 1970s.

Committee Decisions on Monetary Policy: Evidence from Historical Records of the Federal Open Market Committee PDF

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